Health care open enrollment: Choose it or lose it
With so many changes afoot, it's essential to study your health care options.
Oh, joy. It's open-enrollment season at work, when you get to pick your health care plan and other benefits for the coming year. Argh, I'll just stick with my current plan, you think. Who wants to read all that boring paperwork?
That could be a major mistake. Automatically renew your plan, and you might be surprised to find that family members are excluded in 2010 or your out-of-pocket health care expenses far exceed your grasp. (Plus, 10% of employers will drop your coverage if you don’t actively select a plan for next year, said Gerri Willis, personal-finance editor at CNN.)
All indications are the plan you have today won’t look the same next year. So, what should you be on the lookout for as you study your health care options?
Higher costs. Health insurance companies are raising rates, and your employer -- who likely pays the bulk of your premiums if your job comes with health coverage -- will likely pass some or all of that higher cost to you. The Wall Street Journal reports:
Employees will pay $4,023 on average in premiums and out-of-pocket charges next year, up 10% from 2009, according to a projection from Hewitt Associates, a benefits-consulting firm. In dollar terms, it's the biggest boost since the firm started keeping track of the data a decade ago.
This surely makes a pre-tax flexible spending account all the more attractive. Don't overlook that option for next year.
One factor driving up costs, The New York Times explains, is that lots of people took advantage of preventative care this year, fearing job loss and subsequent loss of insurance.
Plus, soaring health care costs have been a fact of life in the U.S. The Kaiser Family Foundation said, "Since 1999, premiums have gone up a total of 131%, far more rapidly than workers' wages (up 38% since 1999) or inflation (up 28% since 1999)."
Higher deductibles are also a national trend. The foundation said, "Among covered workers at large firms, 13% now face deductibles at or above $1,000; at small firms (three to 199 workers), 40% face deductibles at or above $1,000 -- including 16% with deductibles at or greater than $2,000." Expect those numbers to go up, not down.
In fact, your employer may push you toward a high-deductible plan. If the plan qualifies under IRS rules, you can set up a health savings account to help cover health care expenses. Expect a deductible of $2,500, $5,000 or more. (Be careful, the Times says. Many of these plans have low limits on hospitalization and low lifetimes caps.)
Changes to family coverage. Some plans will no longer cover spouses or dependents, according to the Times. Or, if they do, that coverage will suddenly be a lot more expensive. (Plus, the insurance company will be checking to make sure your family members are actually eligible.) Time to compare your employer's plans with the options at your spouse's workplace, or consider moving family members with no pre-existing conditions to the private market.
It's a lot to digest, but whatever you do, DO NOT make the decision based solely on the cost of premiums, particularly if you're not in good health. To compare how available plans serve your needs, The New York Times recommends this MetLife tool, which works even if MetLife is not one of your health plan options.
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